Europe Seeking to Activate Accounts for Central Bank

The French, British and German governments have told Iran they are exploring activating accounts for the Iranian central bank with their national central banks in a bid to open a financial channel to keep alive the Iranian nuclear deal, a report said.

The move is the first concrete sign that Europe could deliver on its promise to take steps to sustain the Iranian nuclear deal, setting European governments squarely against the Trump administration’s Iran sanctions policy aimed at isolating Tehran economically, Wall Street Journal reported on Monday.

European Officials involved in discussions said the option of central banks activating Iranian central bank accounts—or reactivating some which have been dormant for years—is one of several that European governments are actively exploring.

The three European governments laid out their plans to Iran during discussions earlier this month among foreign ministers and senior officials in Vienna. Officials said they are still trying to iron out details.

Other European governments, including Austria and Sweden, have also said they would consider doing likewise, the officials said.

Iran would also need to implement legislation to meet anti-money-laundering standards set by an international watchdog, the Financial Action Task Force, the officials said.

The Bank of England had no comment. The French and German national banks didn’t immediately respond to requests for comment.

Last week, Washington rebuffed a formal European request for the US to give European companies broad exemptions from sanctions, which will seek to minimize Iranian energy exports and the country’s commercial links with foreign businesses.

“Until Tehran is ready to make the tangible, demonstrated and sustained shifts in the policies we have enumerated, we will work to apply unprecedented financial pressure on the Iranian regime,” Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo said in response to the European request.

The US officials explicitly warned against doing business with the Iranian central bank, saying it “should not be considered a legitimate institution with which European banks—including central banks—should be engaging.”

US officials have repeatedly said that European companies and people could be targeted if they continue doing business in Iran once US sanctions fully snap back in November. US sanctions apply to foreign as well as domestic companies.

France, Germany, Britain, Russia and China—the countries that negotiated the 2015 nuclear deal alongside the U.S. and Iran—pledged in Vienna to protect “economic operators” for investing or carrying out “commercial and financial activities,” a reference to possible central bank payment channels, according to European officials.

On Monday, EU foreign policy chief Federica Mogherini said the bloc was determined to follow through despite the US refusal to grant exemptions.

“I don’t see this reply as bringing anything new to the work we’re doing,” she said of the US response.

According to two officials, the hope is that by activating euro, sterling and other-denominated accounts for Iran’s central bank in Europe, Iran could more easily repatriate global oil export revenues—or at least use that revenue to purchase key products in Europe.